Fixed Ops Magazine – March 1, 2022
My specialty is helping dealers squeeze every ounce of performance from their reconditioning. I do this to help them get more cars sale-ready faster to save money and meet demand.
One costly error I often encounter is a service or recon manager reactively wanting to add a tech or two to help the shop meet volume requirements and improve labor efficiency. Sometimes this is the right decision, but often it is not.
If you face this decision, and before you go any further, consider time leaks in your recon workflow that when discovered and remedied, will increase labor efficiency and department profitability without adding headcount and payroll.
I recently encountered this situation when this customer asked me to visit and observe shop practices. As part of my analysis, I audited the service department’s payroll. Now I had my solution: an underperforming line technician costing the department $6,700 a month in unrealized billable hours. This type of loss is called unapplied payroll.